The Nigerian naira strengthened to about ₦1,350 per dollar at the official foreign exchange market on Monday, reaching its strongest closing level since April 22 as increased dollar liquidity and higher foreign-exchange turnover supported the currency.
Data from the Central Bank of Nigeria showed the Nigerian Foreign Exchange Market (NFEM) rate at ₦1,349.5372 per dollar, with the currency closing around ₦1,350. That was an improvement of ₦8.07, or 0.59%, from ₦1,357.61 on Friday.
The move marks another sign of improved conditions in Nigeria’s foreign-exchange market, where the naira has stabilised considerably from the sharp volatility seen in previous years.
The appreciation came alongside a sharp increase in interbank trading activity. Foreign-exchange turnover rose 265.86% to $437.53 million on Monday from $119.59 million on Friday, its highest level since July 22.
The number of interbank deals also increased to 178 from 137, indicating stronger participation in the formal market.
Total foreign-exchange inflows into the official market rose to $1.77 billion from $830 million in the previous week. Domestic sources accounted for 63.44% of inflows, while exporters contributed 31.2%. The CBN supplied $252.1 million, equivalent to 14.3% of total inflows.
Analysts have linked part of the naira’s recent strength to the CBN’s decision to ease restrictions around banks’ access to its Standing Lending Facility, an overnight liquidity window that allows eligible banks to borrow from the central bank.
Ayodeji Ebo, chief executive of MDU Capital, said the revised rules could have supported the naira by giving banks greater flexibility to manage liquidity after participating in foreign-exchange transactions and government securities auctions.
He also pointed to stronger foreign-exchange supply, rising reserves and relatively moderate dollar demand as factors supporting the currency.
Nigeria’s external reserves rose to $52.25 billion as of August 13, according to the figures provided, up 28.32% from $40.72 billion a year earlier. Higher reserves strengthen the CBN’s capacity to provide liquidity when necessary and improve confidence in the country’s external position.
The naira also gained in the parallel market, where buying and selling rates improved to about ₦1,405 and ₦1,413 respectively, narrowing the gap with the official market.
The currency remained near ₦1,350 early Tuesday, trading around ₦1,352.22 per dollar.
The naira also strengthened against the pound and euro, closing at ₦1,830.11 per pound and ₦1,564.79 per euro.
The sustainability of the naira’s gains will depend on whether improved dollar supply can keep pace with demand from importers and other businesses. Oil receipts, foreign investment, diaspora remittances, reserves and CBN policy will remain key drivers.
Ebo said further narrowing of the official and parallel-market spread would reduce opportunities for arbitrage and strengthen confidence in the currency’s recovery.
For businesses, a more stable naira could improve import-cost planning and reduce exchange-rate uncertainty. But sustained gains will ultimately depend on deeper and more consistent foreign-exchange liquidity rather than short-term market movements.
